Today, Startup Grind held an event with David Cowan. David is a partner at Bessemer and has an impressive resume. Among many other things, David founded Verisign, invested in more than 20 companies which have gone on to IPO and was named to the 2011 Forbes Midas List, which ranks the world’s top venture investors. Also, he has blog in which he posts advices for entrepreneurs (and several other topics).
In tonight’s talk, he provided a lot of insight into the startup and VC world, and here are some key lessons:
Simplify the messaging and proposition of your business. To deeply understand what Verisign does, he would need to go into RSA, certificates... but they simplified the explanation down to “we provide the driver’s license to drive around the internet”
Differences between startups/VCs today and 10 years ago
- Technology used to be particles, but now it’s a wave. Now, you buy a service and you expect to also be buying a constantly changing technology which will get better and better.
- Internet law: every 18 months, you can create a secure and scalable e-commerce in ½ of the time and with ½ of the money. Nowadays, you can create interesting technology much faster and cheaper. Instead of hiring a consultant to figure out if your idea has a market, just build it and get people to try it out.
- Related to the previous point: changing gears is very easy. Today, failure is an option because starting over is not expensive
- The VCs used to be the guys that would help you save a failing idea by pouring more money. Now, they say “this is not working, let’s kill it. And let’s work together on something else”
Types of entrepreneurs
David sees mostly two types of entrepreneurs. On one side, there are the ones who by all means just want to start a company (and don’t really care about what the company do). On the other side, there are the ones who are crazy about a certain need/problem, and believe they can solve it better than anyone else. The second type is usually much more successful. You’ve gotta do what you love.
Talking to VCs
When talking to a VC, it’s important to be able to explain past failures. Also, it’s OK to say “I don’t know” for questions you still don’t have answers for.